Shanghai District Court: Ether Should Be “Protected by Law” as General Property

  • The Shanghai Hongkou District Court in China recognized cryptocurrenciesl ike ether shold be protected by law.
  • This in a case in which the defendant refused to return 20 ETH to an ICO investor.

A recent unfair enrichment case in China has shed some light on how the country’s legal system is approaching cryptocurrencies. In the case, the Shanghai Hongkou District Court recognized Ethereum’s ether (ETH) should be “protected by law” as general property.

The case, according to a post on Baidu, involved a total of 20 ETH (about $4,600) that had been transferred to a “technology company” that was issuing tokens through an initial coin offering (ICO).

China notably banned the fundraising practice last year, along with digital currency exchanges, which forced users to resort to peer-to-peer trading. ICO projects that had already raised funds were, at the time, told to return them to investors.

Per the news outlet, in this case the company refused to return the 20 ETH. The plaintiff reportedly reached out through text messages, letters sent by his lawyers, and other means. The defendant reportedly “refused to communicate” with the plaintiff.

In court, the defendant claimed cryptocurrencies like ETH weren’t recognized nor permitted in the country and, as such, the case had no legal basis The court ruled the plaintiff had a right to ask for his funds back, as he managed to prove he transferred them through blockchain records and letters from companies called Nanchang Digital Network Technology and Hangzhou Rongzhi Technology confirming the funds had been received.

It noted, however, China doesn’t recognize the monetary properties of cryptocurrencies like ether, although it “cannot deny” that ether “should be protected by law as general property.” The post reads:

The court considered that the current state didn’t recognize the monetary properties of so-called “virtual currencies” such as ether, and prohibited financial activities in them, including their circulation. However it cannot deny the fact that ether should be protected by law as general property.

According to the piece’s author, this means a precedent may have been set, as the country will likely keep on admitting cryptocurrencies like ether should be protected by law. Future cases, however, may have other obstacles to go through.

Per the author, similar cases will need the legal name of the person or entity who received the funds, as well as other distinguishable data such as its residence. Due to the cryptocurrency space’s nature, ICO projects could merely add fake information.

Earlier this month, as CryptoGlobe covered, China’s central bank issued a warning regarding ICOs and cryptocurrency trading. This as crypto exchanges have been able to bypass the country’s crackdown by changing their domain names.

Note: Some sentences in this article were translated from Chinese.

Facebook’s David Marcus says Libra Doesn't Threat Monetary Sovereignty of Nations

  • David Marcus defends libra as a technology to improve existing monetary framework.
  • The former PayPal president says that the Libra Association will be in full compliance with regulators.

Former PayPal president and head of Facebook’s libra David Marcus has taken to Twitter to challenge the idea that the digital currency will threaten the monetary authority of sovereign nations. 

No Monetary Disruption

In a string of tweets published Sept. 16, Marcus took issue with how Facebook’s cryptocurrency is being portrayed as a disruptor of global fiscal policy.

As opposed to challenging the existing framework, Marcus believes that libra will serve as a tool for improvement. He explained that the digital currency is being designed as a “better payment network and system” to work on top of the existing fiat infrastructure. 

In addition, he highlighted that libra is a stablecoin deriving its value from a basket of fiat currencies. In order for libra to remain a robust form of payment, it relies upon the continued success of national fiat, rather than creating an all-together new form of money.

Marcus concluded by stating that the Libra Association intends to be in full compliance with regulatory oversight and is willing to work with central banks and lawmakers to ensure the proper implementation of the currency.

Just last week, senior US Treasury official Sigal Mandelker told an audience in Geneva that libra would be held to the highest standard of regulatory compliance in order to combat money-laundering and terrorism funding. 

 

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